Skip to content

Milton Friedman on Inflation

The sharper response of production than of prices is typical. An inflationary process, once underway, develops an inertia of its own. It takes an economic slowdown to stop the acceleration of prices and, even then, it takes a long time to restore price stability. That is why it is so important to prevent inflation from gaining momentum.
Monetary Policy
Column, 1968, Newsweek (June 3, 1968); reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 225–226, p. 226 of the 1968 House reprint
Checked against the sourceRead the originalCite this passage

Where this comes from

Checked against the sourceThe wording was checked against the work itself.

Topics

He also said

  1. Over short periods, many factors other than monetary growth affect the rate of inflation. But, as chairman Burns implied, over long periods, monetary growth is dominant.
    The Inflationary Fed
    Column, 1973, Newsweek, August 27, 1973; reprinted in the Congressional Record, Extensions of Remarks, November 7, 1973, p. 36327, introduced by Representative Robert Huber of Michigan as “Mr. Milton Friedman’s article that appeared in Newsweek of August 27, 1973”, Congressional Record, November 7, 1973, p. 36327
    Checked against the sourceRead the original
  2. It takes several years for monetary growth to exert its full influence on prices. As a result, we have so far experienced only the early effects of the nearly 8 percent rate of growth of the past year and a half.
    The Inflationary Fed
    Column, 1973, Newsweek, August 27, 1973; reprinted in the Congressional Record, Extensions of Remarks, November 7, 1973, p. 36327, introduced by Representative Robert Huber of Michigan as “Mr. Milton Friedman’s article that appeared in Newsweek of August 27, 1973”, Congressional Record, November 7, 1973, p. 36327
    Checked against the sourceRead the original
  3. The price system works so well, so efficiently, that we are not aware of it most of the time. We never realize how well it functions until it is prevented from functioning, and even then we seldom recognize the source of the trouble.
    Free to Choose
    Book, 1980, Ch. 1 "The Power of the Market", p. 14
    Not yet checked

Think this quote is wrong, misattributed, or missing context?Report it and it gets fixed, not argued with.